Statistics show that our population is growing at an unprecedented level, and at twice the rate of the global average. Having reached 22 million last year, the population grew at 2.1 per cent, or 440,000 people in the year to September 2009. That is faster than Malaysia, Philippines, India, Indonesia and Vietnam. In comparison, the world population is growing at 1.1 per cent.

This can mean great opportunities, particularly in the residential property market. Of course, everyone needs to be housed! There are also plenty of risks, with many people feeling uncomfortable about how sustainable our country is as we march towards a projected population of 35 million by 2050.

The numbers stack up as follows:

• 1 birth every 1 minute and 46 seconds,
• 1 death every 3 minutes and 42 seconds,
• a net gain of 1 international migrant every 1 minute and 46 seconds,leading to,
• an overall total population increase of one person every 1 minute and 1 seconds.

There are plenty of political implications in this, and the media is full of stories about the lack of planning in the major cities, the high immigration rate, the foreign student visa issues, and of course the illegal boat arrivals. In fact, for the first time in history, the Prime Minister has recently appointed Tony Burke as the Minister for Population, whose first task is to develop Australia’s first comprehensive Population Strategy.

Have you thought about how you might benefit from this shift in our demographic landscape? One obvious answer is that with an exploding population, housing demand will increase dramatically, as everyone will need a place to stay.

Using the accepted yardstick of 3 people per family unit, simple maths suggests that a new home needs to be completed every 3 minutes, or 20 per hour. This translates to 480 a day, which means 175,200 a year!

If that’s the demand side, what does the supply side look like? The simple answer is woeful, and annual housing starts are actually declining in the face of the increasing demand.

As supply tightens, rents will increase, as will property prices. This is a basic economic fact, and it is the major reason why property investors are back in the market in such numbers.

Investors have realised that rather being part of the solution, the federal and state governments are a big part of the problem. The slow release of land coupled with high taxes and levies means that there is an inadequate supply of new land on which to build. Investors expect that little will change in housing supply terms, despite all the political talk. They are therefore taking advantage of the excellent opportunity on offer.

If you decided today to build a new investment property, by the time it was completed (a typical project takes about 9 months), the population would have grown by about 390,000, meaning additional demand for almost 130,000 new homes!

With the already existing backlog of 190,000 homes, which is growing by 30,000 to 40,000 each year, do you think you’d find a tenant to lease it? In addition, do you think its value would keep rising due to the imbalance in supply and demand?

The bottom line is that if you aren’t capitalising on this huge shift in our population by getting involved in the investment property needed to house it, you could be missing a perfect opportunity to set yourself up for the future.

Smart investors are out there every minute of every day, thriving on the exploding demand for accommodation. Why not you?

If you would like to learn more and discuss how McCarthy Group can assist you, click here.